Exercise 12-11 Indirect: Preparing statement of cash flows LO P1, P2, P3, A1

[The following information applies to the questions displayed below.]

The following financial statements and additional information are reported.

IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016
	2017				2016
Assets
Cash	$	104,500			$	49,000
Accounts receivable, net		72,500				56,000
Inventory		68,800				94,000
Prepaid expenses		4,900				6,400
Total current assets		250,700				205,400
Equipment		129,000				120,000
Accum. depreciationEquipment		(29,500	)			(11,500	)
Total assets	$	350,200			$	313,900
Liabilities and Equity
Accounts payable	$	30,000			$	37,500
Wages payable		6,500				16,000
Income taxes payable		3,900				4,800
Total current liabilities		40,400				58,300
Notes payable (long term)		35,000				65,000
Total liabilities		75,400				123,300
Equity
Common stock, $5 par value		230,000				165,000
Retained earnings		44,800				25,600
Total liabilities and equity	$	350,200			$	313,900

IKIBAN INC. Income Statement For Year Ended June 30, 2017
Sales				$	703,000
Cost of goods sold					416,000
Gross profit					287,000
Operating expenses
Depreciation expense	$	63,600
Other expenses		72,000
Total operating expenses					135,600
					151,400
Other gains (losses)
Gain on sale of equipment					2,500
Income before taxes					153,900
Income taxes expense					44,390
Net income				$	109,510

Additional Information

1. A $30,000 note payable is retired at its $30,000 carrying (book) value in exchange for cash.
2. The only changes affecting retained earnings are net income and cash dividends paid.
3. New equipment is acquired for $62,600 cash.
4. Received cash for the sale of equipment that had cost $53,600, yielding a $2,500 gain.
5. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
6. All purchases and sales of inventory are on credit.

Exercise 12-11 Part 1

Required:

(1) Prepare a statement of cash flows for the year ended June 30, 2017, using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

IKIBAN, INC.
Statement of Cash Flows (Indirect Method)
For Year Ended June 30, 2017
Cash flows from operating activities
Adjustments to reconcile net income to net cash provided by operating activities
Income statement items not affecting cash
Changes in current operating assets and liabilities
Cash flows from investing activities
Cash flows from financing activities
Net increase (decrease) in cash
Cash balance at prior year-end
Cash balance at current year-end